Correlation Between Barings Global and Columbia Small
Can any of the company-specific risk be diversified away by investing in both Barings Global and Columbia Small at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Barings Global and Columbia Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Columbia Small Cap, you can compare the effects of market volatilities on Barings Global and Columbia Small and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Barings Global with a short position of Columbia Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Columbia Small.
Diversification Opportunities for Barings Global and Columbia Small
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Columbia is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Columbia Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Small Cap and Barings Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Barings Global Floating are associated (or correlated) with Columbia Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Small Cap has no effect on the direction of Barings Global i.e., Barings Global and Columbia Small go up and down completely randomly.
Pair Corralation between Barings Global and Columbia Small
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.1 times more return on investment than Columbia Small. However, Barings Global Floating is 9.53 times less risky than Columbia Small. It trades about 0.3 of its potential returns per unit of risk. Columbia Small Cap is currently generating about -0.15 per unit of risk. If you would invest 870.00 in Barings Global Floating on September 20, 2024 and sell it today you would earn a total of 8.00 from holding Barings Global Floating or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Columbia Small Cap
Performance |
| Timeline |
| Barings Global Floating |
| Columbia Small Cap |
Barings Global and Columbia Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Columbia Small
The main advantage of trading using opposite Barings Global and Columbia Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Columbia Small can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Columbia Small will offset losses from the drop in Columbia Small's long position.| Barings Global vs. Mutual Of America | Barings Global vs. Amg River Road | Barings Global vs. Palm Valley Capital | Barings Global vs. William Blair Small |
| Columbia Small vs. Barings Global Floating | Columbia Small vs. Franklin Mutual Global | Columbia Small vs. Ab Global Risk | Columbia Small vs. Mirova Global Green |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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